Sony Reports Stronger-Than-Expected Third Quarter, Says Hack Attack Will Not Affect Return To Profit

Sony downplayed the long-term impact of the devastating hack attack against its film division as the Japanese giant trimmed its loss forecast to $1.4 billion, boosted by higher-than-expected sales of its image sensors and PlayStation video game consoles.

Sony Pictures benefited from a weakening Yen to show a provisional profit of $20 million (24.3 billion Yen) for the fiscal third quarter ended December, despite the hack attack.  However, the studio also saw a 90 percent fall in operating income compared to the same period in 2013 due to the hacking and lower theatrical revenue. The cyberattack against the studio is also expected to cost Sony in the region of $15 million “in investigation and remediation costs,” according to the interim report.

“We don’t think the leaking of unreleased films online or the damage to the IT systems will cause a significant loss,” said Sony VP Kazuhiko Takeda. “We had insurance against cyberattacks, and will be able to recover a significant portion of the costs.”

Sony had delayed the announcement of its earnings for the October-December quarter to March, citing the cyberattack that Sony Pictures suffered in November in the run-up to the release of The Interview. That attack dominated headlines and crippled the film studio for weeks, even warranting a public intervention from President Obama, whose administration accused North Korea of being behind the attacks.

The Interview has subsequently earned over $40 million in online sales, with its international release rolling out in February.

In advance of that delayed release, however, Sony execs issued new earnings forecasts for the fiscal year ending in March, and reported preliminary results showed that operating profit had doubled to $1.5 billion (178.3 billion yen) in the October-December quarter, while sales rose 6 percent to $21.8 billion (2.56 trillion yen).

That was ahead of the results expected by analysts.

Chief Executive Kazuo Hirai said Wednesday the company would announcing a “new business strategy” on Feb. 18.